Denel gets new Board to stabilise "tarnished" defence and technology giant

Speaking at Denel Dynamics, the group's missile and UAV division, Gordhan said his intervention was based on the goal set by President Cyril Ramaphosa during his 2018 State-of-the-Nation address. “We will intervene decisively to stabilise and revitalise state-owned enterprises. The recent action we have taken at [power utility] Eskom to strengthen governance, root out corruption and restore its financial position is just the beginning...”

Gordhan listed the board's priorities, including restoring sound corporate governance, reviewing the effectiveness of the management team and reviewing major contracts. The immediate aim is to improve the company’s financial position with a view to creating sustainability whilst harnessing the expertise of Denel’s 4,000 employees, many of whom possess unique skills as specialist engineers.

The Minister reiterated that Denel is a strategic national asset – for national security and for technology- and economic development. "Between 2010 and 2016 Denel experienced phenomenal growth, averaging over 15% per annum... winning significant export contracts and the order book peaked at R30 billion."

According to the Minister, this positive storyline has lately deteriorated significantly because of bad decisions, including the Denel Asia saga in 2016 that deeply tarnished the Denel brand.

"Denel now faces the real threat of collapse unless far-reaching decisions are taken urgently," he affirmed. "And if any corruption is uncovered, those responsible will be prosecuted."

For chairperson Monhla Hlahla (Pictured right)  the focus in the next few months would be getting the financial statements of 2017-18 right, understanding Denel's core business and to come up with a stepped approach to designing a solution as a team, she stated.

She heads a team that includes highly skilled and experienced individuals, with notable business, military and technology expertise.